Indian Markets Outlook for the week (06 - 10.08.2012)

[rupeedesk]

Indian Markets Outlook for the week (06 - 10.08.2012)

Key stock indices will take cues from overseas markets next week due to a lack of triggers on the domestic front. European markets and US futures rose ahead of the July non-farm payrolls data, which was released post market hours yesterday. Post market hours, the Labor Department said that US non-farm payrolls rose by a seasonally adjusted 163,000 jobs in July. However, this was not enough to bring down the unemployment rate, which ticked up to 8.3% from 8.2% in June. European markets and US futures continued to trade higher after the data was released. Taking cues from European markets during the session, local stock indices ended off 1% lows. Local stock indices ended off 1% lows yesterday, taking cues from the European market.

Looking the options data Nifty is likely to trade in a range of 5000-5300 in the week ahead. This range may be breached on the upside next week as considerable amount of buying has been witnessed in call options. Scepticism still prevails over the sustainability of any gains though. With the growing risk posed by the monsoon, plus the obvious continuing risk of renewed 'risk off' from the eurozone, (CLSA's report titled) GREED & FEAR will shave the small overweight in India by a percentage point this week and add another percentage point to lower beta Malaysia said CLSA Asia-Pacific Markets in a report Thursday. The India Meteorological Department yesterday said that the southwest monsoon this year is slated to the worst in three years at around 85% of the long-period average, with high probability of a drought in northwest India.

In an absence of any policy measures, either overseas or back home, action in the market is likely to remain stock-specific, particularly as several companies are to report their Apr-Jun earnings next week. DLF, Steel Authority of India, Bharti Airtel, Mahindra & Mahindra, Tata Power Co, Cadila Healthcare, Steel Authority of India, MOIL, Punj Lloyd, Bharti Airtel, Ranbaxy Laboratories, Tata Motors, Tech Mahindra, Bharat Petroleum Corp, State Bank of India, Sun Pharmaceutical Industries, GVK Power & Infrastructure, Oil India, and Pantaloon Retail are some of the companies reporting earnings early next week. Lack of new project launches and a sluggish real estate market is likely to pull down industry major DLF Ltd's year-on-year net profit by 27% during Apr-Jun to 2.61 bln rupees. Steel Authority of India Ltd is likely to report an 11% on year rise in its profit after tax at 9.28 bln rupees for the quarter-ended June on better realisations. Both companies detail their results on Monday.

BGR Energy Systems, which reported its result post market close yesterday, may slip as its Apr-Jun net profit of 336.6 mln rupees. Future Capital Holdings stocks may also be in focus as the company yesterday said it will cease to have any exposure to the beleaguered Deccan Chronicle group after the former's promoter group decided to take over 1.7-bln-rupee loans given to the latter at book value.

By RUPEE DESK

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